Final Four Proves March Madness, But Is It Good For Business?
CNBC Sports Business Reporter
For the first time in NCAA men's basketball tournament history, there will be no number one or number two seed in the Final Four. It's surely fun to see Butler still in it and VCU — who had to win one more game than the other teams — still around. But is it good for business?
First, let's talk about ratings. Last year, the Duke-Butler final was the highest rating in eight years, but that had a lot to do with Duke. The prevailing thought is that CBS — in its first year with Turner on its 14-year, $10.8 billion deal — can't be too happy that it will be guaranteed at least Butler or VCU for the title game. I've debated a lot of people on this, but here's the case for it not being good. Basketball fans, who would already watch the matchup, love the thrill of the Cinderella. But Cinderellas don't exactly bring in the casual fan, who are more likely to get drawn in by a big name. The other side of the debate says that a great story is worth more than it gets credit for. And that people are easier to draw in thanks to social media.
"Butler-VCU will outperform the low expectations because of two levels of populism," said Dan Shanoff, the founder of Quickish, a real-time news company that curates quick-hit reactions from trending topics. "First, casual fans can emotionally connect with the idea of Cinderella -- and in this case, Cinderella versus Cinderella. And there's a valuable novelty to that. This is like nothing we have ever seen in the modern history of college basketball, if not all of sports."
Shanoff also says that this is the first real Twitter Final Four. "Presuming the game is as close as it is expected to be, tune-in will increase as casual fans hear from trusted sources in their social graph that they have GOT to put the game on," Shanoff said.
Now, let's talk about ticket sales. Ticket prices for the Final Four have been lower in general since the NCAA decided to move the games into football stadiums. But the Final Four combination of UCONN, Butler, VCU and Kentucky isn't exactly good for the ticket business. UCONN doesn't travel particularly well. The school recently lost $1.6 million for failing to sell 5,400 of the 10,000 tickets allotted to them for the Fiesta Bowl. Butler, which has an alumni base of only about 40,000, spent their ticket money last year when the games were in Indianapolis, miles from their campus. VCU has big alumni numbers, but no Rams fan could have expected to go to Houston. That being said, the fact that fans get can one-stop, roundtrip plane tickets on AirTran from Richmond to Houston for $800 has to be considered cheap. Kentucky is the saving grace and has the potential to add a huge positive from the ticket standpoint since the Wildcats haven't been since 1998.
Still, Pat Ryan, co-owner of the Ticket Experience in Houston told me Sunday night that he was selling seats to all Final Four games for about 20 percent less than he had hoped. Ryan said, with the teams involved, the corporate client that drives prices up just wasn't going to be there. "The big executives won't be clamoring for tickets to fly people out and do a ton of entertaining the way they would have if there had been some more historic teams," Ryan said. Ryan said that corporate America loved a good story line, but the one they were looking for was BYU's Jimmer Fredette, not Butler or VCU.
Yet big money in Texas will help fill some of the 77,000 seats. "Texas has thousands upon thousands of multimillionaires that own successful and profitable oil field and related businesses," Ryan said. "Those guys definitely will be doing less entertaining than I was planning, but they'll still be buying a decent amount of tickets. I couldn't imagine a host city like New Orleans or Minneapolis trying to keep this weak matchup glued together."
Merchandise is also a big downer business wise. According to a new Harris Poll, Kentucky is the fourth most popular basketball team in America, behind Duke, North Carolina and Ohio State. But one executive, with extensive knowledge of the sports retail hot market, said this: "Kentucky is like a small market Major League Baseball team winning the World Series. Popular, but just not that big nationally." In its most recent ranking, the Collegiate Licensing Company, which manages the trademarks of hundreds of colleges and universities, had Kentucky as the ninth best selling school in its roster, behind Texas, Alabama, Florida, Michigan, Georgia, LSU, North Carolina and Penn State. The Harris Poll had UCONN dropping out of the Top 10 most popular men's college basketball team list this year and you can imagine that VCU and Butler aren't close to being in the Top 50.
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